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Replies to #666 on Snack info board
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Lord DarkHelmet

01/14/11 9:38 PM

#669 RE: Jedi RDHLightHelmet #666

I will always let you know my entries. Are you able to do them yet?

Longterm strategy - ~15% / month ROM (return on Margin) with very manageable downside gives you 435% return / year.

Your cash will start to grow exponentially.

The challenge will be and always is quickly exiting a position that is going against you and doing it decisively.

80-90% of well thought out positions will never reach their strike....and getting 15% is not that difficult, even with conservative strategies.

I have not been very conservative this month and I am up about 37%. I am going to be a little more careful next month.

The key is don't even think about opening any spreads unless they are no less than 30 days to expiration. I would really consider not opening any trades more than 3 weeks to expiration and then pyramid your margin into the position(s) every 4-5 days. The less time your money is in the position, the less likely the security will move against you given the technicals prior to trading.

And this makes technical investing even more important, because that is really all you are doing is swing trading with options as opposed buying the actual security. You want to understand the fundamentals of the company to some extent, but as long as earning are not going to be announced or huge news hits that could quickly swing the technicals against you, then all you need to do is ride the time decay over 2.5-3 weeks and sell a PUT or CALL ~5% OTM (out of the money). Most real securities won't move that much that quickly. These are not pennystocks. But again, never go against the technicals.